The Conference Board Economics Watch® - European View

The Conference Board Leading Economic Index®(LEI)for the Euro Area fell in May, led by declines in confidence indicators and stock prices

As slower growth in the rest of the world (U.S., China) is not offsetting Euro Area losses, recession will extend into second half of 2012

Bailout of Bankia set off deeper banking crisis in Spain, which led to a request for a 100 billion euro bailout for a broader group of troubled banks

Uncertainty about Greece’s willingness to comply with the terms of its bailout agreement adds to financial risk, even after pro-bailout party emerged victorious in election

Gradual movement toward more joint responsibility, such as a banking union, is more likely than a radical policy breakthrough or collapse; EU leaders may consider these issues at today’s and tomorrow’s summit

Fiscal programs are likely to represent a drag on the Euro Area economy in 2012 and 2013, especially in the weakest countries